Tens of thousands of Americans file for bankruptcy each month in an effort to regain solid financial footing in the long-run. January, with its fresh start symbolism, may be an excellent time for some individuals to file. However, many people are hesitant to file because they have not been properly informed about frequently asked questions related to life after bankruptcy.
The immediate aftermath of filing for bankruptcy can inspire tremendous relief, as creditors must stop bothering you due to a provision in bankruptcy law known as an automatic stay.
Yes, it will take time to rebuild your credit, given that your bankruptcy will be reflected in your credit score for several years. However, this will not prohibit you from obtaining a car loan or even a home loan at certain interest rates in many cases after a relatively short period of time.
Sometimes a certain period of time must pass before you can qualify for certain kinds of credit again, but filing for bankruptcy will lead you to better credit in the long-run if you maintain healthy financial habits as you rebuild your score.
Simple steps like paying bills on time will slowly but surely help you to rebuild your score. By the time your bankruptcy is no longer reflected on your credit report, these efforts will have paid off significantly.
Life after bankruptcy will likely be calmer and less stressful than life before bankruptcy, provided that you can take the fresh start you have been granted and build on that financial foundation in positive ways.
Source: New York Times, “Life After Bankruptcy,” Vicki Elmer, Sep. 13, 2012